acquisitions

Craft Brewing’s Growing Pains

In the last couple of months, MarketWatch.com’s Jason Notte has seen disquieting trends in the craft beer industry:

  • Craft Brew Alliance’s Redhook brand announced layoffs at its Woodinville, Washington, brewery. The Woodinville plant is contract-brewing for Pabst Brewing Company, but the Pabst business accounts for only 30 percent of its capacity.
  • Stone Brewing Company, headed by fiercely independent CEO Greg Koch, admitted that it had received $90 million in private equity financing and would lend the Stone name to a hotel. It, too, is cutting jobs.
  • And homebrew supply retailer Northern Brewer has agreed to be acquired by than Anheuser-Busch InBev.
  • Notte doesn’t think these developments mean the craft beer bubble has burst. He writes:

    “If anything, it all begrudgingly recognizes that the players in all tiers of the beer industry have found themselves in the same predicament: Running a business in an environment where constant growth isn’t a given and where big decisions are often followed by unintended fallout.”

    The Friday Mash (Strait and Narrow Edition)

    On this day in 1520, Ferdinand Magellan discovered a navigable sea route separating South America and Tierra del Fuego. The treacherous body of water is now known as the Strait of Magellan.

    And now…The Mash!

    We begin in Columbus, Ohio, where Scotland-based BrewDog will have a brewery up and running late this winter. BrewDog is also raising capital by crowdfunding: you can buy shares for $47.50 each.

    It took him 16 tries, but reddit user “boomboomsaloon” finally succeeded in buying beer using a Blockbuster Video membership card as proof of age.

    “It’s like a death in the family”, said Revolution Brewing Founder Josh Deth after he recalled more than 10,000 barrels of beer that didn’t meet his brewery’s quality standards.

    Kirin Brewing Company, Japan’s second-largest brewery, will buy a 25-percent stake in Brooklyn Brewing Company. Kirin will introduce Brooklyn’s beers in Japan and distribute them in Brazil.

    Food blogger Kyle Marcoux aka The Vulgar Chef found a new way to pair beer and pizza. He made a koozie by rolling a square pizza base with pepperoni and mozzarella around a beer can.

    Engineers at University of Colorado have developed a process to make lithium-ion battery electrodes from the sugar-rich wastewater created in the beer-making process.

    Finally, beer writer Josh Bernstein says these six trends will be the talk of 2017: Marzen beers in the fall, the revival of Kolsch beers, juice-like IPAs, milk stouts, coffee beers, and fruited sour beers.

    The Friday Mash (Blowout Edition)

    One hundred years ago today, Georgia Tech defeated Cumberland University, 222-0, in the most lopsided college football game of all time. Tech coach John Heisman had an incentive to run up the score: back then, football rankings were based on margin of victory, not strength of schedule.

    And now…The Mash!

    We begin in Asheville, North Carolina, where Catawba Brewing has honored a native son, author Thomas Wolfe, with a beer called Wolfeman Kolsch. Its ingredients include hops grown in western North Carolina.

    Even though the economy has improved since the Great Recession, beer sales at bars and restaurants have stayed flat. Factors include competition from brewery taprooms and growlers.

    Two more non-beer companies are rolling out their own beers: Vice Media and the clothing company Patagonia, Inc.

    In the UK, the brewery count has topped 1,700. An industry analyst says that some of the country’s craft breweries are attractive acquisition targets.

    Some in the brewing industry oppose legal marijuana for fear of losing market share. However, that hasn’t happened in Colorado and Washington State, where recreational pot is legal.

    Entrepreneur Josephine Uwineza plans to open a brewpub in Kigali, the capital of Rwanda. It will not only be Rwanda’s only women-owned brewery but also the country’s first-ever craft brewery.

    Finally, People for the Ethical Treatment of Animals raised eyebrows by claiming that beer is healthier than milk. PETA contends that beer can strengthen bones and extend life, while milk is linked to obesity, diabetes, and cancer.

    The Friday Mash (“Be Prepared” Edition)

    On this date in 1907, Sir Robert Baden-Powell set up the Brownsea Island Scout camp on the south coast of England. That nine-day event—we assume that no beer was served to campers—was the foundation of the Scouting movement.

    And now…The Mash!

    We begin in Scotland, where the Innis & Gunn brewery has released a “Vintage” beer that is meant to be aged. One bottle has been put inside a time capsule, which is not to be opened until 2116.

    Old Style beer will return to its La Crosse, Wisconsin, birthplace. The brewery will make an Oktoberfest-style version of the 114-year-old brand for the city’s annual Oktoberfest U.S.A.

    After winning his third Tour de France, Britain’s Chris Froome celebrated in style. In the Tour’s final stage, he handed out bottles of beer to his teammates.

    According to the libertarian magazine Reason, state beer laws continued “a slow creep in the right direction.” However, many bad laws remain on the books.

    The Smithsonian has posted a want ad for a beer historian/scholar. This three-year position, funded by the Brewers Association, will pay $64,650 plus benefits.

    Some breweries try too hard to be original, and wind up giving their beers awful names. Thrillist.com calls out some of the worst offenders.

    Finally, Jim Vorel of Atlanta magazine criticizes Terrapin Brewing Company for selling a majority interest to MillerCoors—and then keeping mum about the transaction on social media.

    The Friday Mash (Boomer Sooner Edition)

    One hundred and twenty-five years ago today, at high noon, thousands of people took part in the Oklahoma Land Rush. Within hours, Oklahoma City and Guthrie had instant populations of 10,000.

    And now…The Mash!

    We begin in Tumwater, Washington, once the home of Olympia Brewing Company. Today, it’s the home of a cluster of legal marijuana growers and processors—including one of the state’s largest.

    Peru’s Cerveza San Juan beer brand has replaced the roaring jaguar with barnyard animals on its cans. The reason? The brewery is calling attention to the big cat’s endangered status.

    Officials have reinstated beer at the University of Missouri’s “Tiger Prowl”, where graduating seniors eat barbecue, get free merchandise, and get ready to say goodbye to their classmates.

    Anheuser-Busch InBev has acquired its eighth craft brewery, Devil’s Backbone of Roseland, Virginia. Established in 2008, Devil’s Backbone has won multiple Great American Beer Festival medals.

    The Vietnamese love beer, and craft brewers have begun to enter the market. One new craft is the Pasteur Street Brewing Company, whose founders include Vick’s Florida native John Reid.

    Forbes magazine’s Tara Nurin explores “pay-to-play” in beer distribution. Even after a high-profile crackdown in Massachusetts, she says it’s “a common yet whispered business practice”.

    Finally, Don Russell aka Joe Sixpack takes us back to the bad old days of Prohibition’s “needle beer”: speakeasy owners injected alcohol into near beer—which was still legal in the 1920s. One customer, who sampled the stuff, compared it to 44-D cough syrup.

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